Why we should talk about it?
We’ve all been there: You have a bad day, so you treat yourself to a new pair of shoes or an expensive meal. You feel good in the moment, but later on, you realize that you’ve spent way more money than you should have. This is emotional spending, and it can wreak havoc on your finances. In this blog post, we’ll explore what emotional spending is, why we do it, and most importantly, how to overcome it.
What is emotional spending?
Emotional spending is when you use money to soothe negative emotions such as stress, anxiety, or sadness. It’s a form of impulse buying that’s triggered by our emotions rather than our actual needs. Emotional spending can take many forms, from buying clothes or electronics to indulging in expensive meals or vacations. While it may feel good in the moment, emotional spending can lead to financial stress, debt, and other long-term financial consequences.
The science and statistics behind emotional spending are revealing. A survey conducted by CreditCards.com found that nearly a third of Americans (32%) have used their credit cards to buy things to make themselves feel better. The same survey found that a huge majority of those people (87%) regretted their purchase. Worldwide, emotional spending affects up to 15% of people, numbers growing.
Why do we do it?
Emotional spending is often a response to stress, anxiety, or other negative emotions. It can also be a result of boredom or a lack of fulfillment in our lives. In some cases, emotional spending may be a way to fill a void in our lives or to seek validation from others. It’s also not a rare case that we seek to treat ourselves for an achievement with a purchase. Whatever the reason, it’s important to recognize that emotional spending is a habit that can be changed with the right tools and strategies.
Tips to overcome emotional spending
Admitting that we have a problem with emotional spending is a crucial step in overcoming it. Many people feel ashamed or embarrassed about their spending habits, which can prevent them from seeking help or making changes. However, it’s important to remember that emotional spending is a common issue that affects many people. By acknowledging that you have a problem, you can start to take action and make positive changes in your life.
Recognize your triggers
Another important step to overcoming emotional spending is to identify what triggers it. Keep a journal or a log of your spending habits, and pay attention to when and why you make impulse purchases. Are you stressed, anxious, or bored? Are you seeking validation or trying to fill a void in your life? Once you identify your triggers, you can take steps to avoid or manage them.
Track your spending
Keeping track of your spending is a great way to stay on top of your finances and be conscious of your spending habits. Make sure to track all of your purchases, including those made with cash, to get a full picture of your spending.
Create a budget
A budget is an essential tool for managing your finances and avoiding emotional spending. Start by tracking your income and expenses, and then create a plan for how you’ll spend your money each month. Make sure to include a category for discretionary spending, such as entertainment or clothing, but set a limit on how much you can spend in each category. You can also check our tips on getting started with budgeting.
Apply the 24-hour rule
One of the best ways to avoid emotional spending is to wait before making a purchase. If you see something you want, wait 24 hours before buying it. This will give you time to think about whether you really need it or if it’s just an impulse purchase.
Try other ways to cope
Instead of turning to shopping to cope with negative emotions, find other ways to manage stress and anxiety. Try meditation, exercise, or spending time with loved ones. These activities can help you feel better without breaking the bank.
If you’re feeling overwhelmed, reach out to someone you trust. Talking to a friend or family member can help you gain perspective and make better decisions.
Final thoughts on emotional spending
Emotional spending is a common habit that can have serious consequences for our finances and our mental health. By acknolwedging it, recognizing our triggers, learning to track incomes and expenses, creating a budget, waiting it out, finding other ways to cope, and seeking help when needed, we can overcome emotional spending and take control of our finances and our feelings. Remember, managing your money and your emotions is a journey, but with the right tools and strategies, you can achieve financial wellness and emotional balance.
ViziWealth is here to help you get in control of your spending!
Using ViziWealth, you can track and analyze your incomes and expenses, set saving goals, and monitor how you progress towards them.